AM Best has placed under review with developing implications the Financial Strength Rating of B (Fair) and the Long-Term Issuer Credit Rating of “bb” (Fair) of Stellar National Life Insurance Company (Stellar) (Phoenix, AZ).

The Credit Ratings (ratings) reflect Stellar’s balance sheet strength, which AM Best assesses as adequate, as well as its marginal operating performance, limited business profile and appropriate enterprise risk management.

These rating actions are due to Stellar’s pending strategic initiatives to improve its capital position and begin to execute on its business plan, as the company has curtailed the production of new annuity business until further capital can be sourced to bolster the balance sheet and fund future growth. The ratings will remain under review with developing implications while AM Best monitors the status of capital initiatives and fully reviews the impact.

Stellar has focused on becoming a fully digital issuer of annuities, while partnering with U.S. independent annuity sales channels. Invested assets are managed by Stellar National IM, LLC (Stellar IM), an affiliate of Stellar’s parent company, Stellar National Holdings, LLC (Stellar Holdings). Stellar IM has a strategic investment relationship with Blue Vista Capital Management, LLC, an indirect owner of Stellar Holdings, which has a particular expertise in the commercial mortgage lending space and over $5 billion in assets under management.

Partially offsetting factors include the increasing exposure to interest rate risk as Stellar’s annuity book of business grows, and the challenges that come with executing its business plan.

This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best's Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

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